Some Unease in Tech Circles About Comcast Deal

A cable truck returns to a Time Warner Cable office in San Diego, California in this December 11, 2013 file photo.

REUTERS

Most big Silicon Valley companies remained mum after the Comcast-Time Warner Cable deal was announced, despite the fact that many of them rely on cable companies and others to deliver broadband service to homes. But some venture capitalists and other high-tech executives weighed in.

Some of them fretted about the possibility that a bulked-up Comcast could gain additional leverage it could use to hobble competing digital video services or other websites.

“If we have less choice and the gatekeepers just get stronger, the gatekeepers will stifle innovation,” said Bijan Sabet, a partner at venture capital firm Spark Capital.

Sabet and several other executives expressed hopes that the Federal Communications Commission would use its oversight of the merger to strengthen the still-evolving policies and regulations that are sometimes summed up by the phrase “net neutrality.”

Technology companies, particularly startups, long have said broadband providers such as Comcast shouldn’t be allowed to discriminate among Web content by granting some companies faster Internet connections.

As part of Comcast’s 2011 acquisition of NBCUniversal, Comcast already has agreed to abide by net neutrality provisions. The company offered to extend that pledge to Time Warner Cable markets if the merger goes through, even though the FCC’s own net neutrality rules are in flux after a court ruling last month.

Brad Burnham, a venture capitalist with Union Square Ventures, said Comcast’s proposal didn’t go far enough. He said the FCC should move to put Internet service providers under the same stringent rules as telephone companies, which long have been required to create a level playing field for all phone calls.

“The trade should be Title II regulation,” said Burnham, referring to the part of the FCC code dealing with telephone companies.

Fred Wilson, a partner of Burnham’s at Union Square, also said the FCC should use the Comcast merger to push more broader availability of super-fast Internet services based on fiber-optic cables. Comcast said Thursday it faces stiff broadband competition, including from new Internet services offered by Google Inc.

But the Web-search giant offers its Internet access in just a handful of cities such as Austin, Texas, and Provo, Utah. “If we could get fiber in every market, we could have a three-way competitive market,” Wilson said.

A Google spokeswoman declined to comment on the transaction Thursday.

Some tech executives also said they believe Comcast after absorbing Time Warner Cable would have more resources to expand its own digital-video services, and give them preferred treatment over those offered by companies like Netflix Inc., Amazon.com Inc. and Apple Inc. “Step Two is they’re going to do their own version of these services,” Sabet said.

Comcast also has put in place caps on how much Internet data a household can use each month. The company has said the goal is to limit the tiny fraction of subscribers who hog a disproportionate share Internet bandwidth and slow down speeds for everyone else.

It’s unclear how the merger might spread broadband-usage limits to Time Warner Cable, or whether in the future Comcast will apply the caps to a bigger chunk of its subscriber base.

“Consumers want their content, anytime, anywhere, on all their connected devices,” said Charlie Nooney, chief executive of MobiTV, a provider of digital-video services.

“I believe that the FCC recognizes the power of consumer choice and will be very mindful of the way the market is headed when they review the Comcast-Time-Warner deal.”